Moody’s: 2021 looks brighter for Indian corporates

Moody’s pointed out that lockdowns cannot be eliminated yet, as recovery would remain slow

As reported by The Hindu, situations would strengthen for Indian enterprises in 2021 as the economy progresses post-lockdown and revenue improves from increasing demand from all sectors, said Moody’s Investors Service.

Sweta Patodia, Moody’s analyst, mentioned, “broad-based demand revival and a low base in 2020 will support strong GDP growth of 10.8 percent in India in fiscal 2022 ending March 2022, following a decline of around 10.6 percent in fiscal 2021 – the country’s first contraction in four decades.”

Due for 2021, Moody’s anticipates a stable outlook for Indian organisations. Such enterprises will face better economic conditions as the economy develops following lifted lockdown restrictions and revenue grows on the basis of higher demand across sectors.

Patodia added, “a combination of higher earnings and reduced capital spending will support deleveraging over the next 12 to 18 months.”

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In spite of that, new lockdowns cannot be ruled out definitely since recovery would still be weak as new cases gradually increase, even though at a slower rate.

The environment’s low-interest rate and prevalent credit availability will support enterprises with a strong financial structure to recapitalise and grow. Financially weaker players might face operating challenges and liquidity.

Moody’s commented that the outlook for the Indian corporate sector demonstrates its anticipation for the sector’s underlying business conditions all through the following 12 to 18 months.